State yanks $10.9 million in federal money from Harrisburg School District over audit dispute

The state Department of Education has suspended $10.9 million in federal grants to Harrisburg School District, saying the suspension would be lifted when the district complies with the requests of a firm that’s conducting an audit of the district.

Superintendent Sybil Knight-Burney and Business Manager Bilal Hasan met with Department of Education officials Wednesday to discuss the audit, after school district officials refused to give auditors access to the district’s eFinance system.

The school board last week voted not to cooperate with auditor’s request to access the system. Hasan argued that he has provided auditors with the data they have requested, but he insists that the district is not required to provide access to its financial database.

The district issued a news release shortly before 5 p.m. Wednesday saying that when they met with education department officials at 2 p.m. Wednesday, they received a list of 14 unanswered information requests, which they said were out of 300 that the district had received and answered.

The district agreed to answer 13 of the information requests within 48 hours, and the state gave the district six days. However, the district said it will not comply with the request to provide access to its eFinance system.

“At the conclusion of the meeting, the District was informed by PDE that as of 12:00 noon today, just two hours before the 2:00 pm meeting, approximately $10 (million) in federal funding had already been suspended," the news release said. "These funds represent approximately 6% of the district’s $150M in annual revenues.”

The district said it did offer to give auditors access to the system via a school district employee trained in the finance system, but said the offer was rejected.

School Board member Carrie Fowler, who was among a minority of board members who voted to open the district’s books to state auditors, said Wednesday that she hopes the district “stops playing games with our children’s education.

“Federal money is crucial to our school district and essential for daily operations for our children,” she said. "Open the books to the state and let’s get back to the task of educating our children, hiring a business manager, CFO and a permanent full time principal at (John Harris High School).”

The audit was supposed to examine the district's accounting practices, budget projections and internal controls, among other things. The district is considered by the state to be in financial distress.

The auditor general’s office typically conducts audits for state agencies, such as the department of education. But in this case, the department was looking for some very specific, technical things that his office typically doesn’t do, DePasquale said earlier this week. That’s why he believed they hired an outside auditing firm to conduct the audit.

“This isn’t your traditional school district audit,” he said. “The fact that the school board is not cooperating is just bizarre.”